Statement of Hank Barry, CEO of Napster, Following Today's Oral Arguments in Front of the 9th Circuit Court of Appeals

REDWOOD CITY, CA - October 2, 2000 - We are very grateful for the opportunity to have our case heard before the Ninth Circuit and look forward to the Court's decision. We strongly believe that members of the Napster community who share music on a person-to-person non-commercial basis are not violating any law.

I am very proud of our legal team. We will use every possible avenue to defend our position in court; however, I want to take a moment at this time to note our surprise that we have been unable to resolve this case outside of the judicial process. Napster users are the music industry's best customers and as evidenced by strongly increasing CD sales and the growing numbers of artists who support us, Napster is a tremendous promotional vehicle for emerging and established artists. In a competitive marketplace, a promotional opportunity of this magnitude could not be ignored.

Over a period of many months, Napster has made serious proposals to each of the major record companies and their publishing affiliates that involve payments of substantial percentages of expected company revenues to compensate artists and rights holders - proposals whose most conservative estimates would result in payments of over $500 million to the industry in just the first year alone. Every one of these proposals has been rejected, and the record companies have made no counterproposals.

Just as we will continue to press our case in court and on Capitol Hill, we will continue to seek an agreement with the recording industry because we believe that our 32,000,000 users deserve nothing less.